All Questions
13 questions
1
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2
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567
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Is it possible for the stock market to beat inflation forever?
Just a few thoughts on the possibility of markets beating inflation in the long, long term (say, hundreds of years). I am a theoretical physicist, not an economist, so please forgive my ignorance.
I ...
1
vote
3
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153
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How do we know that inflation derives from supply chain issues and not from monetary expansion of Central Banks?
Everybody is talking about the fact that the current inflation derives from problems on supply chain distribution but Fed also printed tons of money.
How can they affirm that inflation is from supply ...
- 23
1
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1
answer
64
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Why does absolute price inflation depend on interest rate while relative price inflation does not?
This is a follow-up of my previous question: How come there is inflation in a model with no money? I have answered my own question with an example.
To briefly recap the example, consider a closed ...
- 480
2
votes
2
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786
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How come there is inflation in a model with no money?
I'm watching the video lectures of Financial Theory (ECON 251) by John Geanakoplos, Yale University. In Lesson 5, Chapter 4 at 33:41, Geanakoplos defined inflation as the ratio of prices between two ...
- 480
1
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2
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401
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Why in the quantitative equation: $MV=PY$, $V$ and $Y$ can be taken as fixed?
To equation is
\begin{align}
MV=PY
\end{align}
where $V=\frac{1}{k}$.
Why $V$ and $Y$ can be taken as fixed or constant?
Why can $V=\frac{1}{k}$ too?
Thanks in advance
- 215
0
votes
3
answers
3k
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What is the difference between "borrowing" money and "printing" money?
When a country's government has a budget shortfall, that country has to find some way to pay its contractors/emplooyees. Unlike a normal company, the government can't simply go to the bank and ask to ...
- 159
1
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0
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49
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How would a global Robin Hood deed affect the economy? [closed]
In one fiction series about a dystopian world, a small group of wealthy criminals owned a large fraction of the world's cash, which was on their bank accounts in a single offshore bank. In the happy ...
- 119
4
votes
1
answer
136
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How buying bonds indirectly from the government prevents the central bank from financing government deficit?
From Krugman's macroeconomic textbook (highlighting is mine):
"In an open-market operation the Federal Reserve buys or sells some of
the exist- ing stock of U.S. Treasury bills, normally through ...
- 1,135
1
vote
1
answer
83
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Does Direct Benefit Transfers make an economy poorer?
Printing money and giving to the poor causes inflation.
Increases demand and hikes prices. This is basically certain.
But on the contrary, a paper titled Debunking the Stereotype of the Lazy Welfare ...
- 11
3
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2
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626
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Why has M1 grown a lot faster than M3 after the financial crisis?
While the fed has printed a lot of money the last decade and the M1 money quantity growth rate has gone up significantly (red), the M3 growth rate (blue) is almost exactly the same as before the ...
- 115
0
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1
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873
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Quantity theory of money
Suppose the velocity of circulation (V) is constant. Annual growth rate of real GDP is 5%. The money
supply grows by 14% per year. Use the quantity theory of money to calculate the inflation rate.
My ...
2
votes
2
answers
101
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Why did it take so much QE by the ECB to raise the Eurozone inflation to 2%?
From 2015 to 2018 the ECB increased the money supply by around 20% (around 6% y/y), with a GDP increase rate under 1%. Yet the inflation rate remained under 2%. A back-of-the-envelope calculation ...
4
votes
3
answers
1k
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Why doesn't the government create money, spend it for free without interest, and recollect it with taxes?
I was thinking of a better monetary system, and here is what I came up with. I'd like to know if this would work, as I see if offers many advantages over our debt-based monetary system today.
A new ...
- 149